A definition of branding that will help you to build a global brand

This article first appeared in the 30/09/2011 edition of The Malaysian Reserve

Over the years, companies have invested phenomenal amounts of money in marketing and advertising activities such as sales calls, direct mail, TV, outdoor, indoor, print and other advertising, brochures, leaflets and more. Indeed, according to Nick Wreden in his book Profit brand, How to increase the profitability, accountability and sustainability of brands, over US$1.5 trillion is spent annually on marketing (including advertising) worldwide and yet according to McKinsey, a management consultancy, up to 90% of products fail to become brands.

With little or nothing to show for these significant investments, companies looked to other disciplines and soon Branding was considered the way forward and the last 10 years has seen a major change in the resources committed to Branding.

As a result of this interest, hundreds of traditional books and ebooks have been written on the topic of Branding. Thousands of newspaper and magazine column inches have been dedicated to the discipline. Workshops and seminars have been held all over the world, all promising to teach business people how to Brand. These presentations are often uploaded to slideshare and Youtube videos have appeared, all with content related to Branding.

Many companies, including I suspect, yours have explored the concept and many have actually embarked on what they thought was a branding or rebranding exercise. Indeed, only recently, Malayan Banking Bhd (Maybank) announced it had gone through a rebranding exercise and even the Prime Minister attended the press launch of the new ‘brand’.

At the press conference, Malayan Banking Bhd President and CEO Datuk Seri Abdul Wahid Omar unveiled a new logo and explained that the bank would be spending RM13 million on the implementation exercise across the Asian region and that it would take about a year.

On the face of it and with the only evidence a new logo, this does not look like a rebranding exercise. This is more like a brand identity makeover or corporate identity reengineering, nothing more.

Another financial institution recently made a similar announcement and stated that it would spend RM15 million on a rebranding exercise. Soon after I received nine emails for a product that I didn’t understand and with a tagline that offered an exclusive deal for MasterCard holders even though I am not a MasterCard user.

Other well-known companies from the transportation, media and distribution industries have recently announced rebranding exercises that have actually been little more than a new advertising campaign.

The reality is that the new Maybank logo and identity will probably not make a difference to the brand and how consumers and organizations view the brand or the profitability of the brand. Think about it, when was the last time you signed up with or changed your bank because of a competitor’s logo?

This confusion is not Datuk Seri Abdul Wahid Omar’s fault. If we have to point fingers, we should probably point them at the marketers and advertising agencies responsible for muddying the branding waters.

It is because they have confused business owners and consumers with their contradictory interpretations that there is still a lot of confusion about Branding, the concept of Branding, what constitutes a Brand, what is Branding and how to build a Brand.

But this article is not about pointing fingers it is about identifying a definition of branding that will help Malaysian SMEs and other companies use scarce funds effectively and efficiently.

So what is a good definition that Malaysian companies can use as a foundation for their branding efforts?

We created this definition in 2004 and it still rings true today:

A brand is a long term profitable bond between an offering and a customer.

This relationship is based on offering economic, experiential and emotional value to those customers.

And it is backed up by operational excellence and consistently evaluated and improved.

 

We have used this as a foundation to build Malaysian brands and all of them have benefited from using this to take their brand forward. But what does it mean and how can Malaysian companies like yours use it as a foundation for their branding efforts? To do this, we need to break the definition down into three parts, as per the paragraphs above.

The first paragraph relates to two key elements, profitability and retention. One of the reasons that advertising, marketing and other traditional communications campaigns are so ineffective is that too many companies spend an absolute fortune getting a customer into their shop or showroom and then after the customer buys something, they just let them walk out the door! Isn’t it incredible that firms let customers walk out the door without attempting to at least try to build some sort of bond with them?

If you don’t why should the customer come back again? Don’t kid yourself that your product (there are some exceptions) is so unique that they will ignore other products and fight off all the attempts to lure them into competitor stores even though you have absolutely no relationship with them.

Profitability is an important branding metric, much more important than reach or awareness. It is estimated that up to 15% of a firms customers are unprofitable. You need to know who are your unprofitable customers and get rid of them.

If you have a car that won’t start and you send it to the garage and the mechanic says the engine is broken so you take the car to the paint shop and paint the body, will it help to fix the engine problem? Of course it won’t. It is the same with a brand. If you are receiving numerous complaints about the quality of your products or the time it takes to be served at a branch and you ask an advertising agency to create a new logo and you put that new logo on all your company materials, it won’t solve your quality or service issues or make your brand any better.

But if you carry out research with your customers and identify what are their requirements for economic, experiential and emotional value and then match your product attributes to those requirements for value you will make sales. And if you’ve laid the foundations for retaining those customers, as mentioned earlier, then you will be on your way to building a brand.

And by developing this emotional connection with your customers in which you deliver economic, experiential and emotional value, which incidentally will be done across multiple touch points such as when they use the counter service, through your correspondence and marketing collateral, the way you handle enquiries, your packaging, in one on one meetings with your representatives and so on, there will be no interest or need for them to take their business elsewhere.

In fact you will be surprised at the effort they will put into returning to you. And provided you keep your product or service relevant and continue to interact with those customers across platforms and channels that they engage with then you will be building a brand.

Operational excellence is a key ingredient in your quest to build a brand. It doesn’t matter how much you spend on marketing, sales, advertising etc if your organization isn’t efficient and effective it will struggle to deliver value and ergo, build a brand.

Finally, it is important to continually improve to stay relevant so you must track, evaluate and improve your brand on a continuous basis.

Instead of looking at branding as a creative exercise or short term tactical communications exercise, look at it as a holistic strategic initiative that requires internal and external research, investment in retention and not just acquisition, investment in the organization and a desire to constantly improve.

Follow these rules and you are more likely to build a global Malaysian brand.

A is for Advertising

This is a good place to start a compendium of branding terms because unfortunately, it is where many companies start their brand building. And that’s a shame, no tragedy because it is an expensive exercise in futility to try and build a brand using advertising alone.

Advertising can be traced back to around the late eighteenth century when the first print ads appeared in the USA. However, they were rarely much more than extensions of the editorial copy and newspapers were reluctant to allow ads that were bigger than a single column. Even magazines preferred to print all the advertisements at the back of the publication.

Mass advertising only really began in the second half of the nineteenth century when firms began to produce greater quantities of more and more products thanks to improved production techniques. Soon after manufacturing, other businesses such as department stores and mail order firms jumped on the bandwagon and by 1880 advertising in the US was estimated to be in the region of US$200 million. This grew to almost US$3 billion by 1920.

In the mass economy of the 1930s to the 1990s that coincided with the growth of mass circulation magazines, advertising companies proliferated. At the same time, companies wanting to stand out from the competition determined, quite rightly that the quickest way to grow was to raise the profile and awareness of the company’s product or service by informing or reaching as many people as possible in the shortest time.

The most common way to do this was via advertising, especially via TV advertising. The business of advertising is based on a model of repetition across mass media. OK, creativity is important, initially anyway, but once you get over the wow factor, the idea is to repeat the same message through as many channels as possible for as long as possible.

Budget played (and still does) a significant part in what sort of advertising an agency may recommend. It is important for you to know that from the advertising company point of view, the size of the available budget will determine two main points, 1) who works on the project (in terms of seniority and talent) and 2) what channels will be utilised. A larger budget generally results in TV advertising becoming part of the recommendations.

Other platforms include print advertisements, billboards, lamp post buntings, banners, taxi, bus and tube trains, coffee shop tables, flyers, leaflets and more. The introduction of the Internet has seen a proliferation of banner ads, tower ads, unicast ads, contextual ads, takeover ads, interstitial ads, floating ads, and other options to an already noisy, crowded and complicated marketplace. It is important to note that none of these initiatives are branding, they are all advertising and advertising is a tactical initiative not a strategic initiative, like branding.

In the mass economy and unfortunately still to this day, once a campaign has launched, probably to much fanfare, the client waits with anticipation to see the promised sales spike. Meanwhile the agency submitted any well executed commercials to one of the numerous creative shows that offer awards for creativity.

As mentioned earlier, repetition is important and with enough frequency, and perhaps a little vague targeting, this repetition was expected to encourage enough consumers to walk into a store or other outlet and choose or request the advertised product.

The model worked, to some degree fifty years ago but in today’s crowded marketplace, using advertising alone to build a brand is leaving too much to chance. It is simply too difficult to stand out from the crowd. Can you remember the last ‘great’ TV commercial or print ad that you saw? And even if you can, have you bought the product?

Quite often, the promised sales spike didn’t happen, unperturbed and with a straight face, the agency would ask the client for more money, arguing that it is the client’s fault as it should have made more money available in the first place for increased frequency. If you have gone this route, I suggest you bin the advertising agency and call a brand consultant.

Should you still use advertising? Absolutely because advertising will help your company project a vision of the relationship you can deliver to the customer. The ads also help you to educate customers about the value that you can offer them. Advertising must also communicate trust. Unfortunately this is forgotten by most advertisers, especially in South East Asia where outrageous claims made in advertising are rarely backed up in reality. In Malaysia for example, after years of being let down by claims made in advertising, only 14% of Malaysians now believe what companies tell them in their advertising.

But instead of seeking to increase awareness of your product or service with as many consumers as possible, ensure your advertising seeks to communicate with those consumers that are most likely to adopt your product or service.

Make your advertising relevant to those consumers you have targeted. Core messages must be related to those consumers interests, needs and/or desires. So rather than a one-size-fits-all approach in your communications, it is essential for messages to be about offering value to those specific customers and making their life better as a result. How to identify those consumers and what is relevant to them will be explored in brand audits and targetting.

The goal is to ensure a consumer incorporates an offering into their personal or business lives.

Adoption will ensure your brand is seen as the best, hey perhaps even the only choice. This won’t happen on its own. It is a process built on operational excellence, superb sales incorporating ‘top of game’ customer service and the ability to match offerings to the consumers individual requirements for value, on an ongoing basis. To build a brand retention is key and retention requires relationships and without relationships, adoption is not achievable.

And this is good news for Asian companies because the fact is Asian companies, and especially those from South East Asia, simply don’t have deep enough pockets to compete with international brands using outdated one-size-fits-all, mass economy tactics.